The stock fell 14 percent to close at 4.57 ringgit, its steepest drop since September 1998. That’s 17 percent below Petronas’s failed final offer of 5.50 ringgit per share. The shares earlier dropped as much as 15 percent. MISC was the second-biggest decliner in the MSCI Emerging Markets Index today.

Petronas, as Malaysia’s state oil and gas company is known, pulled its bid after failing to win enough minority shareholder support to take the company private, MISC said in a statement on April 19. It earlier raised its offer from 5.30 ringgit per share after some minority shareholders, including the Employees Provident Fund, complained the first bid was too low.

“We are surprised by the outcome as we had expected a better reception,” Cezzane See, an analyst at K&N Kenanga Holdings Bhd., wrote in a report today. Kenanga reverted back to its underperform rating and 4.61 ringgit price target held before the buyout bid. That means it now expects the stock to return less than fixed deposit rates over the next 12 months.

MISC traded at 4.45 ringgit before Petronas announced its initial offer on January 31. The state energy company, which already owned 63 percent of MISC, came 3.9 percentage points short of the acceptance level required to take it private, according to an April 19 stock exchange filing.

‘Not Fair’

Petronas said in January a buyout would have provided it with greater flexibility in deciding its strategic direction. MISC shut its container-ship business last year to focus on LNG tankers after the cargo-box unit made losses of $789 million over three years due to global overcapacity and falling rates.

Independent adviser AmInvestment Bank Bhd. said earlier this month the revised bid was “not fair but reasonable” taking into account the “risks and challenges” faced by MISC. It had urged minority shareholders to accept the offer.

Investors should use today’s drop to accumulate as prospects for MISC “remain bright,” Ahmad Maghfur Usman, an analyst at RHB Capital Bhd., wrote in a report today. The shipping group could benefit from its parent’s expansion in Australia and Canada and could list its LNG shipping division to raise capital to acquire more vessels, he said.

“Such a move will crystalize the valuations of the shipping conglomerate,” said Ahmad Maghfur, who upgraded the stock to buy from neutral with a price target of 5.88 ringgit. “Petronas won’t be making a new offer for six months at least. Beyond that, however, we do not discount the possibility.”

MISC operates the world’s biggest fleet of LNG ships after Qatar Gas Transport Co., according to Clarkson Plc, the world’s largest shipbroker.

“Dissenting minorities believe that there is greater value from the offer price,” Wong Ming Tek, an analyst at HwangDBS Vickers Research Sdn., wrote in a report today. “Longer-term investors are looking beyond the current weakness in petroleum and chemical tanker rates.”